Velo Holdings Inc. New York, NY 10022
EXHIBIT
99.5
Velo
Holdings Inc.
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July
18,
2007
Via
E-Mail, Facsimile and Federal Express
Brencourt
Advisors, LLC
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Attention:
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Re:
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Vertrue
Incorporated (“Vertrue”)
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Dear
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Reference
is hereby made to the
Agreement and Plan of Merger, dated as of March 22, 2007, by and among Velo
Holdings Inc., Velo Acquisition Inc. and Vertrue (the “Merger
Agreement”).
1. Voting. Brencourt
Advisors, LLC agrees, on its behalf and on behalf of its affiliates and its
managed accounts and funds (collectively, “Brencourt”), if the Merger
Agreement is amended to increase the Per Share Merger Consideration (as defined
in the Merger Agreement) from $48.50 to $50.00 (the “Amended Merger
Agreement”), (a) when a meeting of stockholders of Vertrue is held
(including the special meeting of stockholders of Vertrue to consider and
vote
on a proposal to adopt the Merger Agreement, including any postponements
or
adjournments thereof (the “Special Meeting”)), to appear at such meeting
or otherwise cause each share of Vertrue common stock with respect to which
Brencourt has voting power (which includes the Subject Shares (as hereinafter
defined)) to be present thereat for purposes of establishing a quorum; (b)
to
vote or execute consents in respect of each share of Vertrue common stock
with
respect to which Brencourt has voting power (which includes the Subject Shares):
(x) in favor of the Amended Merger Agreement, the Merger and the other
transactions contemplated by the Amended Merger Agreement, (y) at our direction,
in favor of any further adjournment of the Special Meeting; and (z) against
any
action that would or is designed to delay, prevent or frustrate the Merger
and
the other transactions contemplated by the Amended Merger Agreement; and
(c) to
waive any and all appraisal, dissenters and similar rights that Brencourt
may
have with respect to the Merger and the other transactions contemplated by
the
Amended Merger Agreement.
2. Ownership;
Transfer. Brencourt represents and warrants that, as of
the date hereof, it is the owner of 2,744,367 shares of common stock, par
value
$0.01, of Vertrue (the
“Subject Shares”), and has the sole authority, free and clear of any
restrictions, to direct the voting of the Subject Shares in accordance with
the
provisions of this letter. Brencourt agrees that, without our prior
written consent, to not make any transfer, sale, assignment, pledge,
hypothecation or other disposition (including by operation of law), whether
directly or indirectly pursuant to the creation of a derivative security,
the
grant of an option or other right or the imposition of any restriction on
disposition or voting, of any of the Subject Shares.
3. Irrevocable
Proxy.
(a) As
security for Brencourt’s obligations under Section 1 hereof, Brencourt hereby
irrevocably constitutes and appoints Velo Holdings Inc. as its attorney and
proxy in accordance with the Delaware General Corporation Law (“DGCL”),
with full power of substitution and resubstitution, to cause the Subject
Shares
(as well as any other share of Vertrue common stock with respect to which
Brencourt has voting power) to be counted as present at any stockholders’
meeting of Vertrue (including the Special Meeting), to vote such shares of
Vertrue common stock at any stockholders’ meeting of Vertrue (including the
Special Meeting) however called, and to execute consents in respect of such
shares of Vertrue common stock as and to the extent provided in Section
1(a). Brencourt hereby revokes all other proxies and powers of
attorney with respect to the Subject Shares (as well as any other share of
Vertrue common stock with respect to which Brencourt has voting power) that
it
may have heretofore appointed or granted, and no subsequent proxy or power
of
attorney shall be granted. Brencourt represents that any proxies heretofore
given in respect of the Subject Shares (as well as any other share of Vertrue
common stock with respect to which Brencourt has voting power), if any, are
revocable.
(b) Brencourt
hereby affirms that the irrevocable proxy set forth in this Section 3 is
given
in connection with the amendment of the Merger Agreement, and that such
irrevocable proxy is given to secure the performance of the duties of Brencourt
under this Agreement. Brencourt hereby further affirms that the
irrevocable proxy is coupled with an interest and is intended to be irrevocable
in accordance with the provisions of Section 212 of the DGCL.
(c) If,
after the execution hereof, Brencourt should be dissolved or liquidated or
if
any other such similar event or events shall occur, the actions taken by
Brencourt hereunder shall be as valid as if such dissolution, liquidation
or
other similar events had not occurred, regardless of whether or not notice
was
provided to Velo Holdings Inc. of such dissolution, liquidation or other
similar
event.
4. Termination. The
rights and obligations under this letter will terminate upon the first to
occur
of (a) the termination of the Amended Merger Agreement in accordance with
its
terms, and (b) the Effective Time (as defined in the Merger
Agreement).
5. Option. (a) Subject
to the execution of the Amended Merger Agreement, Velo Holdings Inc. hereby
grants to Brencourt the non-transferable right to acquire (the “Option”),
for itself and/or one or more accounts managed by Brencourt and which currently
own Subject Shares, an interest in equity securities of Velo Holdings Inc.
in an
amount of not less than $10,000,000 and not more than $25,000,000, on terms
equivalent to the terms on which Rho Ventures V, Affiliates, L.L.C. and Rho
Ventures V, L.P. (collectively, “Rho”) has agreed to
invest. Brencourt may exercise the Option at any time (but only one
time) prior to the Option Termination Date (as defined below) by submitting
to
Velo Holdings Inc, an executed subscription agreement to subscribe for shares
of
Velo Holdings Inc. capital stock for a purchase price of not less
than
$10,000,000 and up to $25,000,000, on the same terms and conditions that
are
applicable to Rho, including with respect to the execution of a shareholders
agreement in the form agreed to be entered into
by Rho. The “Option Terminate Date” means 11:59 pm
New York City time on the 5th Business
Day (as
defined in the Merger Agreement) after the date on which Brencourt was provided
access to Vertrue’s virtual diligence site.
(b) To
permit Brencourt to perform its due diligence evaluation of Vertrue, Velo
Holding Inc. agrees, from and after the execution of the Amended Merger
Agreement, to not object to Brencourt executing with Vertrue (and if offered
by
Vertrue, Brencourt agrees to execute) a non-disclosure agreement that varies
from the non-disclosure agreement signed by Velo Holdings Inc. by (i) causing
the standstill provisions to terminate upon the later of the termination
of the
Amended Merger Agreement and September 1, 2007, and (ii) removing any waiver
of
shareholder rights that does not conflict with this agreement or that do
not
relate to the Amended Merger Agreement.
(c) Subject
to the consummation of the transactions contemplated by the Amended Merger
Agreement, Velo Holdings Inc. will pay Brencourt an amount equal to its
reasonable and documented out-of-pocket legal fees related to its investment
in
Vertrue, this agreement and the transactions referred to herein, which shall
not
in any event exceed $75,000.
6. Miscellaneous. This
letter represents the entire understanding of the parties hereto with reference
to the subject matter hereof and supersedes any and all other oral or written
agreements and understandings among the parties heretofore made. This
letter shall be governed by, and construed in accordance with, the laws of
the
State of New York. The parties hereto agree that irreparable damage
may occur in the event that any provision of this letter is not performed
in
accordance with the terms hereof and that the non-breaching party will be
entitled (in addition to any other remedy at law or equity) to an injunction
or
injunctions to prevent breaches of the provisions hereof and to enforce the
terms and provisions hereof by a decree of specific performance in any action
instituted in any court of the United States or any state thereof having
jurisdiction without the necessity of proving the inadequacy of a remedy
of
money damages. Nothing in this letter, express or implied, is
intended to or shall confer upon any person, other than Velo Holdings Inc.
or
Brencourt, any right, benefit or remedy of any nature whatsoever under or
by
reason of this letter.
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Notwithstanding
anything to the
contrary set forth herein, the matters set forth in this letter are contingent
upon the approval of the Board of Directors of Vertrue and this letter, even
if
countersigned by Brencourt, is not an agreement, understanding or arrangement
unless and until the Vertrue Board of Directors approves the matters set
forth
above, including, to the extent applicable as a result of such foregoing
matters, Velo Holdings Inc., and its affiliates, becoming an “Interested Person”
as defined in Section 203 of the Delaware General Corporation
Law.
If
you agree with the terms of this
letter, please sign this letter, where upon this letter shall become a valid
and
binding obligation of the parties hereto.
Very
truly yours,
VELO
HOLDINGS INC.
By:
/s/ ▇▇▇▇▇ ▇▇▇▇▇
Name:
▇▇▇▇▇ ▇▇▇▇▇
Title:
Vice President and Secretary
Accepted
and Agreed:
BRENCOURT
ADVISORS, LLC
By:
/s/ ▇▇▇▇▇▇▇ ▇.
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chairman and Chief Executive Officer
cc: Vertrue
Incorporated, Members of the Board of Directors